Q2 & H Highlights

Transcription

1 TSX:TGZ / OTCQX:TGCDF Q2 & H Highlights Thursday, August 2, 2018

2 Forward-Looking Statements All information included in this presentation, including any information as to Teranga s future financial or operating performance and other statements that express management s expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing information about management s current expectations and plans relating to the future. Wherever possible, words such as plans, expects, scheduled, trends, indications, potential, estimates, predicts, anticipate, to establish, believe, intend, ability to, or statements that certain actions, events or results may, could, would, might, will, or are "likely" to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information. Specific forward-looking statements include, without limitation, all disclosure regarding future results of operations, economic conditions and anticipated courses of action. Although the forward-looking statements contained herein reflect management's current beliefs and reasonable assumptions based upon information available to management as of the date hereof, Teranga cannot be certain that actual results will be consistent with such forward-looking information. Such assumptions include, among others, the ability to obtain any requisite governmental approvals, the accuracy of mineral reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, future economic conditions, anticipated future estimates of free cash flow, and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements. The risks and uncertainties that may affect forward-looking statements include, among others, the inherent risks involved in exploration and development of mineral properties, including government approvals and permitting, changes in economic conditions, changes in the worldwide price of gold and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of Teranga. For a more comprehensive discussion of the risks faced by Teranga, and which may cause the actual financial results, performance or achievements of Teranga to be materially different from estimated future results, performance or achievements expressed or implied by forward-looking information or forward-looking statements, please refer to Teranga s latest Annual Information Form filed with Canadian securities regulatory authorities at or on Teranga s website at The risks described in the Annual Information Form (filed and viewable on and on Teranga s website at are hereby incorporated by reference herein. Teranga disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Nothing herein should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities. All references to Teranga include its subsidiaries unless the context requires otherwise. This presentation contains references to Teranga using the words we, us, our and similar words and the reader is referred to using the words you, your and similar words. All dollar amounts stated are denominated in U.S. dollars unless specified otherwise. 2

3 Richard Young President & CEO

4 Achieving Our 2018 Milestones Sabodala Increased FY2018 production guidance to at least 230,000 ounces of gold (originally 210, ,000 ounces) Commenced construction of public buildings as Niakafiri village resettlement progresses on schedule Wahgnion Development Secured $165 million project development facility Commenced major project construction Increased M&I resources by 33% Golden Hill Advanced Exploration Five updates since start of year Reported 4 new exploration discoveries for a total of 9 prospects Secured $25 million facility to finance future advancement of Golden Hill through to feasibility 4

5 Paul Chawrun Chief Operating Officer

6 Increasing FY2018 Production Guidance to at Least 230,000 Ounces Production (oz Au) Increased FY 2018 Production Guidance to at Least 230koz 13% Increase 14% Increase 233,267 At least 230,000 57,557 65, , ,412 Q Q H H FY Outlook 6

7 Reconciling Above the Sabodala Reserves Model 12-month period ended June 30, 2018 vs Sabodala NI Technical Report (1) ~20% more ounces mined across all deposits Refer to Appendix Endnote (1) 7

8 Higher Fuel Prices and Unfavourable Fx Rates Challenge Unit Costs in Q2 and H Guidance: $2.25-$2.50 Mining Costs ($/t mined) 2018 Guidance: $11.00-$12.50 Milling Costs ($/t milled) 2018 Guidance: $4.25-$4.50 G&A Costs ($/t milled) $11.57 $13.02 $2.28 $2.83 $4.39 $4.81 Q Q Q Q Q Q $2.24 $2.81 $11.78 $12.25 $4.09 $4.77 H H H H H H

9 Wahgnion development Primary crusher concrete pour 9

10 Wahgnion development Site infrastructure is moving forward on schedule: Water harvest dam is complete Permanent camp facilities are nearing completion Preparation of the mine services area, site access roads and tailings management facility are progressing well. 10

11 Increased Wahgnion M&I Resources by 33% to 2.4 Million Ounces 2017 Mineral Resources Measured Resources Indicated Resources Measured + Indicated Resources Inferred Resources (2) (3) Deposit MTonnes Grade (Au g/t) MOunces MTonnes Grade (Au g/t) MOunces MTonnes Grade (Au g/t) MOunces MTonnes Grade (Au g/t) Nogbele Samavogo Stinger Fourkoura Total Wahgnion Deposit MTonnes 2018 Mineral Resources Measured Resources Indicated Resources Measured + Indicated Resources Inferred Resources Grade (Au g/t) MOunces MTonnes Grade (Au g/t) MOunces (2) (4) MTonnes Grade (Au g/t) MOunces MTonnes Grade (Au g/t) Nogbele N/Nangolo Samavogo Stinger Nogbele S Fourkoura Total MOunces MOunces 2018 Update Converted 87% (617koz) of Inferred to M&I Notes: Totals may not equal due to rounding. Refer to Appendix Endnotes (2), (3) and (4) 11

12 Golden Hill: Advanced Exploration Program Golden Hill Burkina Faso, West Africa Q Drilling Activity Peksou 17 holes 2,156 metres Jackhammer Hill 8 holes 1,318 metres C-Zone 10 holes 1,086 metres Ma North 8 holes 947 metres Peksou North 4 holes 675 metres Nahiri 4 holes 485 metres Peksou Basin 3 holes 420 metres B-Zone 3 holes 397 metres A-Zone 1 hole 101 metres TOTAL 58 holes 7,581 metres For full details on Golden Hill, please visit GEOLOGY Tarkwaian Type Sediments Volcano Sediments Mixed Volcano Sediments & Volcanics Basalt Grantoid Batholith Nahiri Plateau Ma Main Jackhammer Hill A-Zone C-Zone Nahiri Ma North Ma East Peksou B-Zone Peksou North 12

13 Excellent Grades Near Surface and to Depth at Ma Structural Complex Ma Structural Complex Highlights Extensive structural complex consisting of numerous mineralized structures in close proximity Ma Prospect Representative Drill Section Mineralization remains open for all components of Ma in all directions, including down-plunge of better grade and width components: GHDD-047: g/t gold, including g/t gold from 45 m downhole depth (DHD) GHDD-080: g/t gold from 87 m DHD and g/t gold, including g/t gold from 122 m DHD Newest addition to the Ma area is Ma North, with latest results confirming the presence of a third mineralized breccia zone at the Ma Complex 13

14 High-Grade All Along Strike at Jackhammer Hill Prospect Jackhammer Hill Highlights Jackhammer Hill Representative Drill Section Three phases of early-stage drilling have been completed in multiple altered shear zones demonstrating continuity and depth extent: GHDD-319: g/t gold, including g/t gold from 41 m DHD GHDD-320: g/t gold, including g/t gold uncut grade from 115 m DHD GHDD-334: g/t gold, including g/t gold from 138 m DHD 14

15 Key Exploration Activities Planned for Q Burkina Faso Golden Hill Drilling evaluation continues at Ma, Jackhammer Hill, Peksou North and C-Zone Prospects Geological modeling will progress throughout in preparation for initial resource estimation at year-end Additional metallurgical samples to be collected from various prospects PEA is scheduled to begin in Q Côte d Ivoire Afema Mine License Drilling evaluation begins; BLEG; soils; prospecting/mapping; airborne geophysics Afema Regional BLEG; prospecting/mapping; soils; auger/trenching; airborne geophysics Guitry Follow-up program of composite re-sampling; geophysics; trenching; RC/DDH drilling Dianra Follow-up on Q2 soil results trenching; auger/rab Sangaredougou Infill soils; trenching/auger/rab tie-in with the Guitry exploration program 15

16 Navin Dyal Chief Financial Officer

17 Strong Gold Sales and Higher Gold Prices Drive Increase in Revenue Revenue ($M) 19% Increase $142.4 $ % Increase $72.0 $86.1 Q Q H H Three months ended June 30 Six months ended June % Change Per ounce % Change $1,301 $1,260 3% Average realized gold price* $1,313 $1,243 6% $1,306 $1,257 4% Average spot gold price $1,318 $1,238 7% $1,250 $1,220 2% Low $1,250 $1,151 9% $1,351 $1,294 4% High $1,355 $1,294 5% *Refer to Appendix Non-IFRS Performance Measures 17

18 Lower Year-Over-Year Costs per Ounce Q2 H Guidance Cost of sales ,025 Total cash costs* $/oz sold All-in sustaining costs* 883 1, ,048 1,000 1,075 Non-cash inventory movements and amortized advanced royalty costs All-in sustaining costs (excluding non-cash inventory movements and amortized advanced royalty costs)* (36) (85) (53) (114) (50) ,025 *Refer to Appendix Non-IFRS Performance Measures 18

19 Profit Metrics: Gross Profit and EBITDA* Gross Profit ($ millions) 47% Increase EBITDA* ($ millions) $ % Increase $17.8 $26.1 $23.8 Q Q Q Q % Increase $ % Increase $52.8 $45.7 $33.6 H H H H *Refer to Appendix Non-IFRS Performance Measures 19

20 Q2 Net Profit Attributable to Shareholders & EPS Net Profit Attributable to Shareholders ($ millions) $9.6 Earnings per Share (basic) $11.6 Q Q $0.09 $ % Increase 20% Increase Adjusting for items not reflective of underlying performance 1. $10.9M in realized and unrealized gains on gold forward sales contracts 2. $0.1M net foreign exchange gain Partially offset by 1. $3.2M impact of foreign exchange on deferred taxes 2. $2.5M non-cash accretion expense Adjusted Net Profit Attributable to Shareholders* ($ millions) $9.7 $6.2 Q Q Adjusted Earnings per Share* (basic) $0.09 $ % Decrease 36% Decrease Q Q *Refer to Appendix Non-IFRS Performance Measures Q Q

21 H1 Net Profit Attributable to Shareholders & EPS Net Profit Attributable to Shareholders ($ millions) Adjusted Net Profit Attributable to Shareholders* ($ millions) $15.8 $14.6 8% Decrease Adjusting for items not reflective of underlying performance $16.2 $16.1 ~n/c 1. $7.9M in realized and unrealized gains on gold forward sales contracts H H Earnings per Share (basic) $0.15 $0.14 8% Decrease Partially offset by 1. $1.9M net foreign exchange loss 2. $2.5M impact of foreign exchange on deferred taxes 3. $5.0M non-cash accretion expense H H Adjusted Earnings per Share* (basic) $0.15 $0.15 ~n/c H H *Refer to Appendix Non-IFRS Performance Measures H H

22 Operating Cash Flows Cash Flows Related to Operating Activities, Before Changes in Working Capital Excluding Inventories ($ millions) $22.2 $ % Increase Net Cash Provided by Operating Activities ($ millions) $ % Increase Q Q $7.4 Q Q $46.0 $ % Increase 15% Increase $28.7 $32.9 H H H H

23 Impact of Taurus Facility on Balance Sheet (as at June 30, 2018) Deferred Financing Costs Financing Costs $10.7M Share Warrants (Current Liability) $3.1M Gold Offtake (Non-Current Liability) $14.0M 23

24 Q&A

25 Richard Young President & CEO

26 2018 News Flow and Milestones Sabodala FY 2018 gold production of at least 230koz Continue to advance Niakafiri resettlement Golden Hill Regular exploration updates Initial resource estimation by year end Wahgnion Côte d Ivoire Update reserves in Q3 Update NI technical report in Q3 Project updates from Guitry and Afema 26

27 Appendix

28 2018 Outlook: Increased Production 2018 Guidance Operating Results Ore mined ( 000t) 2,000 2,500 Waste mined ( 000t) 35,000 37,000 Total mined ( 000t) 37,000 39,500 Grade mined (g/t) Strip ratio waste/ore Ore milled ( 000t) 4,200 4,400 Head grade (g/t) Recovery rate % Gold produced A (oz) ~230,000 Cost of sales per ounce sold $/oz sold 950 1,025 Total cash cost per ounce sold B $/oz sold All-in sustaining costs C $/oz sold 1,000 1,075 Non-cash inventory movements and amortized advanced royalty costs C $/oz sold (50) All-in sustaining costs (excluding non-cash inventory movements and amortized advanced royalty costs) C $/oz sold 950 1,025 Mining ($/t mined) Mining long haul ($/t hauled) Milling ($/t milled) General and Administration ($/t milled) Mine Production Costs $ millions Corporate Administration Expense $ millions Regional Administration Costs $ millions ~2.0 Community Social Responsibility Expense $ millions Exploration and Evaluation D $ millions ~15.0 Sabodala Capital Expenditures Mine site sustaining $ millions Site development costs E $ millions Total Sabodala Capital Expenditures F $ millions Growth Capital Expenditures Wahgnion early works G $ millions ~30.0 Wahgnion construction H $ millions Total Growth Capital Expenditures $ millions Notes to 2018 Guidance A. 22,500 ounces of gold production are to be sold to Franco-Nevada Corporation at 20% of the spot gold price. B. Total cash cost per ounce sold is a non-ifrs financial measure and does not have a standard meaning under IFRS. C. All-in sustaining costs per ounce is a non-ifrs financial measure and does not have a standard meaning under IFRS. All-in sustaining costs per ounce sold include total cash costs per ounce, administration expenses, share based compensation and sustaining capital expenditures as defined by the World Gold Council. All-in sustaining costs also include non-cash inventory movements and non-cash amortization of advanced royalties. D. Exploration and evaluation costs includes both Expensed Exploration, primarily attributable to exploration work on exploration permits, and Capitalized Reserve Development, which is work performed on Mine Licenses. E. Site development costs for 2018 include village resettlement costs for the Sabodala village. F. Excludes capitalized deferred stripping costs, included in mine production costs. G. Early works expenditures for 2018 includes anticipated expenditures for the construction of Wahgnion prior to initial drawdown under the Taurus Facility which was executed in May H. Wahgnion construction expenditures for 2018 include anticipated expenditures for Wahgnion post completion of the Taurus Facility. Other This forecast financial information is based on the following material assumptions for the remainder of 2018: gold price: $1,250 per ounce; light fuel oil price $0.87/L; heavy fuel oil price $0.60/L; Euro:USD exchange rate of 1:1.17 Other important assumptions: any political events are not expected to impact operations, including movement of people, supplies and gold shipments; grades and recoveries will remain consistent with the life-of-mine plan to achieve the forecast gold production; and no unplanned delays in or interruption of scheduled production. 28

29 Qualified Persons Statement The technical information contained in this document relating to the Sabodala open pit mineral reserve estimates is based on, and fairly represents, information compiled by Mr. Stephen Ling, P. Eng who is a member of the Professional Engineers Ontario. Mr. Ling is a full time employee of Teranga and is not "independent" within the meaning of NI Mr. Ling has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a "Qualified Person" under NI Standards of Disclosure for Mineral Projects. Mr. Ling has consented to the inclusion in this document of the matters based on his compiled information in the form and context in which it appears in this document. The technical information contained in this document relating to Sabodala mineral resource estimates is based on, and fairly represents, information compiled by Ms. Patti Nakai-Lajoie. Ms. Nakai-Lajoie, P. Geo., is a Member of the Association of Professional Geoscientists of Ontario. Ms. Nakai-Lajoie is a full time employee of Teranga and is not "independent" within the meaning of NI Ms. Nakai-Lajoie has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a "Qualified Person" under NI Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion in this document of the matters based on her compiled information in the form and context in which it appears in this document. The technical information contained in this document relating to the Sabodala underground ore reserves estimates is based on, and fairly represents, information compiled by Jeff Sepp, P. Eng., of Roscoe Postle Associates Inc. ( RPA ), who is a member of the Professional Engineers Ontario. Mr. Sepp is independent within the meaning of NI Mr. Sepp has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Qualified Person under NI Standards of Disclosure for Mineral Projects. Mr. Sepp has consented to the inclusion in this document of the matters based on his compiled information in the form and context in which it appears in this document. The technical information contained in this document relating to the Wahgnion open pit mineral reserve estimates is based on, and fairly represents, information compiled by Mr. Glen Ehasoo, P. Eng., of RPA, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia. Mr. Ehasoo is "independent" within the meaning of NI Mr. Ehasoo has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Qualified Person under NI Standards of Disclosure for Mineral Projects. Mr. Ehasoo has consented to the inclusion in this document of the matters based on his compiled information in the form and context in which it appears in this document. The technical information contained in this document relating to Wahgnion mineral resource estimates is based on, and fairly represents, information compiled by Mr. David Ross, P.Geo., of RPA, who is a Member of the Association of Professional Geoscientists of Ontario. Mr. Ross is "independent" within the meaning of NI Mr. Ross has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Qualified Person under NI Standards of Disclosure for Mineral Projects. Mr. Ross has consented to the inclusion in this document of the matters based on his compiled information in the form and context in which it appears in this document. Teranga's exploration programs are being managed by Peter Mann, FAusIMM. Mr. Mann is a full time employee of Teranga and is not "independent" within the meaning of NI Mr. Mann has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Qualified Person as under NI Standards of Disclosure for Mineral Projects. The technical information contained in this document relating to exploration results are based on, and fairly represents, information compiled by Mr. Mann. Mr. Mann has verified and approved the data disclosed in this release, including the sampling, analytical and test data underlying the information. The samples are prepared at site and assayed in the SGS laboratory located at the site. Analysis for diamond drilling is sent for fire assay analysis at ALS Johannesburg, South Africa. Mr. Mann has consented to the inclusion in this document of the matters based on his compiled information in the form and context in which it appears in this document. Teranga's disclosure of mineral reserve and mineral resource information is governed by NI under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to time by the CIM ("CIM Standards"). There can be no assurance that those portions of mineral resources that are not mineral reserves will ultimately be converted into mineral reserves. Teranga confirms that it is not aware of any new information or data that materially affects the information included in the technical reports for the Sabodala Project (August 30, 2017) and the Wahgnion Project (October 20, 2017) pursuant to National Instrument Standards of Disclosure for Mineral Projects (the Technical Reports ), or year end 2017 results, market announcements and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements concerning the Technical Reports continue to apply and have not materially changed. 29

30 Non-IFRS Performance Measures The Company has included non-ifrs measures in this document, including total cash costs, total cash costs per ounce sold, all-in sustaining costs ( AISC ), AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs), AISC per ounce, AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs) per ounce, average realized gold price, earnings before interest, taxes, depreciation and amortization ( EBITDA ), free cash flow, adjusted net profit attributable to shareholders and adjusted basic earnings per share. These measures are intended to provide additional information only and do not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate these measures differently. Total cash costs figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is considered the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measure of other companies. Total cash costs per ounce sold is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. The Company reports total cash costs on a sales basis. The World Gold Council ( WGC ) definition of AISC seeks to extend the definition of total cash costs by adding corporate general and administrative costs, reclamation and remediation costs (including accretion and amortization), exploration and study costs (capital and expensed), capitalized stripping costs and sustaining capital expenditures and represents the total costs of producing gold from current operations. AISC excludes income tax payments, interest costs, costs related to business acquisitions and items needed to normalize earnings. Consequently, this measure is not representative of all of the Company s cash expenditures. In addition, the calculation of AISC does not include depreciation expense as it does not reflect the impact of expenditures incurred in prior periods. Therefore, it is not indicative of the Company s overall profitability. The Company also expands upon the WGC definition of AISC by presenting an additional measure of AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs). This measure excludes cash and non-cash inventory movements and amortized advanced royalty costs which management does not believe to be true cash costs and are not fully indicative of performance for the period. For Sabodala and Wahgnion, life of mine total cash costs and AISC figures used in this presentation are before cash/non-cash inventory movements and exclude any allocation of corporate overheads. Consolidated total cash costs and all-in sustaining cost figures add corporate overhead costs. Average realized price is a financial measure with no standard meaning under IFRS. Management uses this measure to better understand the price realized in each reporting period for gold and silver sales. Average realized price is calculated on revenue and ounces sold to all customers, except Franco-Nevada, as gold ounces sold to Franco-Nevada is recognized in revenue at 20 percent of the prevailing gold spot price on the date of delivery and 80 percent at $1,250 per ounce. The average realized price is intended to provide additional information only and does not have any standardized definition under IFRS; it should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate this measure differently. EBITDA excludes income tax, finance costs (before accretion expense), interest income, depreciation and amortization, and non-cash impairment charges from net profits. EBITDA is intended to provide additional information to investors and analysts and do not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Management believes that EBITDA is a valuable indicator of our ability to generate liquidity by producing operating cash flow to: fund working capital needs, service debt obligations, and fund capital expenditures. Free cash flow is calculated as net cash flow provided by operating activities less sustaining capital expenditures. The Company believes this to be a useful indicator of our ability generate cash for growth initiatives. Starting in 2018, the Company adopted adjusted net profit attributable to shareholders and adjusted basic earnings per share as new non-ifrs financial measures. These non-ifrs financial measures are used by management and investors to measure the underlying operating performance of the Company. Presenting these measures from period to period is expected to help management and investors evaluate earnings trends more readily in comparison with results from prior periods. The Company calculates adjusted net profit attributable to shareholders as net profit attributable to shareholders adjusted to exclude specific items that are significant, but not reflective of the underlying operations of the Company, including: the impact of unrealized and realized foreign exchange gains and losses, gains and losses on derivative instruments, accretion expense on long-term obligations, impairment provisions and reversals thereof, and other unusual or non-recurring items. During the second quarter of 2018, the Company also excluded the impact of foreign exchange movements on deferred taxes and other non-cash fair value changes from adjusted net profit attributable to shareholders as management does not believe these factors to be reflective of the underlying performance of the Company. For more information regarding these measures, please refer to the Company s management s discussion and analysis accessible on the Company s website at 30

31 Endnotes 1. Refers to proven and probable reserves of 2.7Moz for the Sabodala project as per reserve estimate as of June 30, 2017 included in the Sabodala NI technical report dated August 30, 2017 available on the Company s website at and SEDAR at 2. CIM definitions were followed for Mineral Resources. Mineral Resources are inclusive of Mineral Reserves and are constrained by resource pit shells. A minimum thickness of two metres was applied. 3. Notes for historical Wahgnion 2017 Mineral Resources Estimate: Open pit oxide Mineral Resources are estimated at cut-off grades ranging from 0.35 g/t Au to 0.45 g/t Au; open pit transition and fresh rock Mineral Resources are estimated at cut-off grades ranging from 0.45 g/t Au to 0.55 g/t Au; high grade assays were capped at grades ranging from 2.5 g/t Au to 48.0 g/t Au; and, Mineral Resources are estimated using a gold price of $1,450 per ounce. 4. Notes for Wahgnion 2018 Mineral Resources Estimate (effective May 31, 2018): Mineral Resources are reported at cut-off grades ranging from g/t Au to g/t Au in oxide, and at cutoff grades ranging from g/t Au to g/t Au in transition and primary rock; high grade assays were capped at grades ranging from 5 to 48 g/t Au; and, Mineral Resources are estimated using a long-term gold price of US$1,500 per ounce, adjusted to match existing industry standards. 31

32 TSX:TGZ / OTCQX: TGCDF Trish Moran Head of Investor Relations 121 King Street West, Suite 2600 Toronto, ON M5H 3T9 T: E: investor@terangagold.com W: terangagold.com